All ADU Resources

ADU vs. Tiny Home: Understanding the Difference

ADUs and tiny homes might seem like the same thing, but there are key differences between the two. Learn more about these alternative housing options.

January 1, 2018

Many people assume that ADUs and tiny homes are the same, but that’s not necessarily the case. It’s important to understand the differences between ADUs and tiny homes so that you can choose the right solution for your housing needs.

What Is an ADU?

An accessory dwelling unit or ADU is an independent housing unit that’s located on the same lot as a separate home, duplex, or multi-family residence. In order to be considered an ADU, the unit typically needs to have a separate entrance, bathroom, kitchen, and living area. However, ADUs can be built in a variety of different ways to meet different housing needs.

For instance, you could build an ADU for the purpose of housing an adult child or an aging parent. You could also build an ADU and rent it out to earn extra income. You could even build an ADU to act as a combination office space and guest suite.

What Are the Different Types of ADUs?

There are three different types of ADUs: attached, detached, and conversion.

Here’s what you need to know about each one:

  • Attached ADUs are attached to the main home. They may be more complicated to build since they require fire-rated separations between the ADU and the main home. However, an attached ADU may make sense for lots with smaller backyards and more cramped space.
  • Detached ADUs are completely detached from the main home. Choosing a detached ADU may limit your space due to setback requirements. At the same time, constructing a new structure from scratch is often more straightforward than adding on to an existing structure. Furthermore, having additional separation from the existing home can lead to more rental income potential in the long run, since there is more privacy from the existing home.
  • Conversion ADUs utilize existing spaces such as basements and garages. These spaces are then converted into separate units by adding an extra bathroom, bedroom, kitchen, and/or entrance.

What Is a Tiny Home?

Tiny homes have small footprints that are typically less than 400 square feet. Tiny homes may also be built on wheels or trailers so that they can be easily transported from one place to another. When stationary, tiny homes are typically placed on their own plot of land separate from other structures.

What’s the Difference Between the Two?

At first glance, ADUs and tiny homes may seem nearly identical. In reality, however, there are some key differences between them, for example:

  • ADUs are constructed on a permanent foundation, whereas tiny homes may be constructed on wheels or trailers.
  • ADUs are constructed on the same lot as the existing home or units. Tiny homes may be constructed or placed on a separate plot of land.
  • ADUs may be attached to the main dwelling or converted from an existing space, whereas tiny homes are typically regarded as separate structures.

At the same time, there are also similarities between the two that are also worth mentioning:

  • Both ADUs and tiny homes can come with all the features of a traditional home, including a bedroom, bathroom, kitchen, and living area, just with a smaller footprint.
  • Both ADUs and tiny homes are affordable housing solutions, especially in places with higher costs of living like Los Angeles and the San Francisco Bay Area.

In fact, an ADU may be described as a “tiny home” if it has less than 400 square feet. Alternatively, a tiny home may be deemed an ADU if it’s located on a permanent foundation alongside a main dwelling.

Pros and Cons of Each

Now that we’ve established the differences and similarities between ADUs and tiny homes, let’s discuss the pros and cons of each so that you can make the right choice for your property and your needs.

Pros and Cons of ADUs

Some of the pros of ADUs include:

  • Variety: ADUs offer a ton of variety and are able to meet a wide range of different needs. Whether you need a home office space or an accessible space for an aging parent, you’re able to design and construct an ADU that works for you.
  • Space: ADUs also provide you with more space than tiny homes. Depending on where you’re located, you may be able to build an ADU of up to 1,200 square feet. In a unit of this size, it’s more than possible to fit multiple bedrooms and bathrooms.
  • Return: ADUs provide you with a great return on your investment by boosting property values. Additionally, you may be able to rent out ADUs to earn extra income.

While some of the cons of ADUs include:

  • Cost: Since ADUs tend to be bigger than tiny homes and are built using the same standards as full-sized homes, they tend to be more expensive to build. That being said, there are ways that you can minimize the cost of your ADU build to save money and maximize your return on investment.
  • Regulations: ADUs also come with regulations and restrictions that vary from location to location. You’ll likely have to deal with setback requirements, size restrictions, height restrictions, and even rental restrictions. For instance, different California municipalities have unique ADU restrictions and regulations. However, the Cottage team is well-versed in the city-to-city differences in ADU regulations and can guide you through the process.

Pros and Cons of Tiny Homes

Some of the pros of tiny homes include:

  • Mobility: Tiny homes can be designed to be totally mobile, thanks to wheels and trailers. This means that you can live a nomadic lifestyle, moving from place to place and enjoying everything that the world has to offer.
  • Cost: Tiny homes also tend to be cheaper to build than ADUs since they’re usually smaller and aren’t built on a permanent foundation. At the same time, you also need to take into account the potential for additional costs if you’re going to be moving your tiny home around and parking it in different places.
  • Green: Tiny homes consume less energy and promote a greener lifestyle. Tiny homes also force you to minimize your consumption since you have less space to work with.

While some of the cons of tiny homes include:

  • Size: At the same time, not everyone can deal with the lack of space that comes with tiny home living. This is especially true if there’s more than one person living in the tiny home, as 400 square feet can get very cramped very quickly in that case.
  • Regulations: Although it may seem like tiny homes come with fewer regulations, that’s not necessarily the case. Tiny homes often require special permits and zoning restrictions may make it difficult for you to find a place to park or permanently build a tiny home.
  • Return: While ADUs are an appreciating asset since they are permanent in nature, tiny homes are usually considered depreciating assets since they aren’t built according to the same standards. As a result, tiny homes offer less of a return on your initial investment.

Which Is Right for You?

If you’re still not sure whether an ADU or tiny home is right for you based on these pros and cons, here’s some additional information to help you come to a decision:

You may want to choose an ADU if…

  • You own a single-family home, duplex, or multi-family residence with enough room for an ADU — whether it be a detached ADU, attached ADU, or conversion ADU.
  • You want to increase your property values and make a solid long-term investment in your property.
  • You want to earn extra income from potentially renting out the ADU on either a short-term or long-term basis.

You may want to choose a tiny home if…

  • You’re now working remotely and want to simplify your life while living more of a nomadic lifestyle.
  • You want to minimize housing costs and limit your consumption.
  • You don’t mind living in a very small space that may not have all the features that you’re used to.

How Do You Build an ADU?

If you’ve decided that building an ADU is the right choice for you, here’s what you need to do to get the process started:

Step 1: Consider Your Needs

Before you begin building your ADU, you first need to consider your needs. Why are you building an ADU in the first place? This is because building an ADU for rental income would likely look different from building an ADU for an aging parent.

Hypothetically, if you were building an ADU for rental income, you would want to maximize the number of bedrooms and bathrooms in the space to charge as much rent as possible. You may even be able to build two separate rental units depending on the size of your lot and your budget.

Alternatively, if you were building an ADU for an aging parent, you would want to make the space accessible and spacious. You may want to include ADA features like ramp entries, easy-access showers, and wider doorways and hallways.

Step 2: Find the Space

Next, you need to find the space on your lot or in your existing home for an ADU. If you have an unused garage or basement space, this would be ideal for a conversion ADU.

If your yard space is limited, then you may want to consider an attached ADU. But if you have plenty of room in your lot to allow for meeting the state’s setback requirements, a detached ADU might be the right choice.

Step 3: Set Your Budget

Before moving forward in the building process, you need to establish a budget for your ADU project, as ADU costs can vary significantly.

For example:

Step 4: Research ADU Builders

Once you have a better idea of your budget, you can begin researching ADU builders for your project. The best place to look for ADU builders is online, as you can get instant access to information about service areas, pricing, and the overall process.

Just make sure to check reviews for any ADU builders that you’re investigating to make sure that they have a good reputation and provide their clients with amazing results.

Step 5: Consult With ADU Builders

Based on the information you gather through your research, you can begin consulting with different ADU builders about your project. ADU builders will likely schedule a site visit to get a better idea of what you’re working with so that they can provide you with accurate information regarding the time frame and cost of your project.

Step 6: Choose Your ADU Floor Plan

Now it’s time for the fun part — choosing your ADU floor plan.

Cottage is an ADU builder that offers custom ADUs or premade floor plans depending on your preferences and needs. Check out some of Cottage’s premade floor plans here or browse through some of Cottage’s custom projects here.

Step 7: Select Your ADU Finishes

With the help of your ADU design team, the next step in the process involves selecting the finishes in your ADU. This includes everything from flooring to cabinets, appliances, lighting, paint colors, and more so that your ADU matches your personal style.

Step 8: Watch Your ADU Dreams Become Reality

Finally, you can watch your ADU dreams become a reality as the building team breaks ground on your ADU project and gets to work. Depending on your lot and your ADU design, the construction of your ADU can take anywhere from four to six months. When you add in the design and permitting stages, the entire process from start to finish usually takes around nine to 12 months.

Final Thoughts

Both ADUs and tiny homes have a lot to offer, but ADUs stand alone in terms of return on investment. Reach out to the ADU experts at Cottage to find out more about the investment potential based on your property, needs, and goals.


Want to Rent Out Part of Your Home? Here's What to Know | The Washington Post

New Study Paints Sobering Picture of Cost of Living in California | ABC 10

Tiny Homes Can Mean Big Costs, Especially Depending on Where You Live | CNBC